New pensions freedoms came into force last week. Whether they want to blow their pension pot on a Lamborghini or keep it for a rainy day, the baby boomers are no longer going to be obliged to use it to buy an annuity. Under the new rules, they will also have the right to pass on what’s in their pension without paying any inheritance tax when they die, a measure likely to further reduce taxes paid by a generation that has done well out of the welfare state.
Meanwhile, recently published research paints an alarming picture of how people in their 20s have been faring in the recession. They have seen real wages drop by more than 12% since 2009, more than four times that experienced by workers aged over 60. “It’s been a terrible recession for young people,” says Gavin Kelly, chief executive of the Resolution Foundation thinktank that published the analysis. “As well as the pace and scale of the falls in pay, young people’s employment levels have been hit much harder than those of other groups.”